ISLAMABAD – Most Favoured Nation status basically increases a set ofadvantages in trade for the recipient country or international tradepartner by the country which is awarding this status. Some of the tradeadvantages which a Most Favoured Nation recieve include low tariffs, highimport quotas.

It also ensures a non-discrimatory trade with the partner nation who hasbeen given the MFN status.

Other advantages which a most favoured nation gets include immunity,privileges, low tarrifs and concessions when trade agreements are sealed.

It basically means that the country which will be granted the status ofMost Favoured Nation will receive a non-discriminatory trade and ensureequal trade among all the WTO member nation. India has granted the MFNstatus to Pakistan in 1996.

Since the Most Favoured Nation status to Pakistan has now been revoked inthe wake of the Pulwama attack, Pakistan will not be getting directbenefits such as immunity in custom duty in goods trade.

India can now increase the custom duties on the goods which are importedfrom Pakistan, however, India-Pakistan trade ratio is not that high,therefore, it’s not going to affect Islamabad much.

Since India-Pakistan does not share favourable poltical relation,Islamabad has already blocked the import of 1209 items from India.

India generally import goods like cement, leather, spices, chemicals,fruits and other stuff and export goods like vegetables, iron, steel,fruits, chemicals. Currently trade between the two countries stands at $2billion where there is a potiential of $37 billion.

The revocation of MFN status to Pakistan means that Islamabad will facedifficulties in trade with India. Moreover, trade to Pakistan will now bedone via Saudi Arabia and not directly through Pakistan.